CAPIS Morning Note – 06/24/22: Stocks Look To Finish The Week On Fire As Moves Above 3800 on The S&P 500 In Pre-Market

Overnight Summary: The S&P 500 closed Thursday at 3795.73 (higher by 0.95%) from 3759.89 (lower by -0.13%)on Wednesday.  Futures are trading higher in the premarket session. The overnight high of 3834 was hit at 1:50 a.m. EDT. The low was hit at 3781 at 8:05 p.m. EDT, a range of 53 points high to low…

Overnight Summary: The S&P 500 closed Thursday at 3795.73 (higher by 0.95%) from 3759.89 (lower by -0.13%)on Wednesday.  Futures are trading higher in the premarket session. The overnight high of 3834 was hit at 1:50 a.m. EDT. The low was hit at 3781 at 8:05 p.m. EDT, a range of 53 points high to low which is a bit above the range of late with 45 the average range. At 7:20 a.m. EDT the current price is 3829 which is 0.77% and +29.25 points.

Earnings Out After The Close:

  • Beats: SWBI +0.15, BB +0.01.
  • Flat: None of note.
  • Misses: CAMP (0.07), FDX (0.01).

Capital Raises:

  • IPOs Priced or News: None of note.
  • New SPACs launched/News: None of note.
  • Secondaries Priced: None of note.
  • Notes Priced of note: None of note.
  • Common Stock filings/Notes:
    • ALNA: Filed Form S-1.. Common stocks and warrants.
    • BSGM: Proposed Public Offering of Common Stock.. Laidlaw Bookmanager.
    • QTNT: Proposed Underwritten Offering.. $20 million of its ordinary shares.. Jefferies and Cowen bookmanager.
    • REED: Filed Form S-3.. 22,457,782 Shares of Common Stock.
  • Pricing of Over-Allotment/Notes: None of note.
  • Direct Offering: None of note.
  • Selling Shareholders of note: None of note.
  • Private Placement of Public Entity (PIPE): None of note.
  • Mixed Shelf Offerings:
    • REPL: Filed Form S-3.. Up to $400,000,000 Mixed Shelf.
  • Convertible Offering & Notes Filed:
    • CD: Successfully Closes $500 Million Syndicated Loan.
    • LIQT: Closing of Private Placement of $6 Million Senior Notes and Repayment of Outstanding Convertible Note.

Capital Raise Summary From The TradeXchange, bringing traders and investors real time news and Squawk Box, and other sources.

News After The Close:

  • After Hours: 
    • Trading Up: BHC +4%, CSTL +4%.
    • Trading Down: CAMP -16%, TREE -12%.
  • News Since The Close:
    • The CDC reported 17 new Monkeypox cases today, bringing U.S. total to 173.
    • Federal Reserve Annual Bank Stress Test – All Banks Tested Remained Above Their Minimum Capital Requirements. (Link) – (WSJ Article)
    •  Japan’s May Consumer Inflation Tops BoJ Target For 2nd Straight Month. (Reuters)
    • Facebook (META), Netflix (NFLX) and PayPal (PYPL) Are Value Stocks Now. (WSJ)
    • Sarepta (SRPT) stock plunges after FDA puts study on hold. (MarketWatch)
    • LendingTree (TREE) stock falls after decline in mortgage activity leads to guidance cut. (MarketWatch)
    • Senate passes bill that would provide incentives to states to pass red flag laws for gun purchases and provide funding for school security; House expected to vote today.
    • Energy Department issues readout of Energy Secretary Granholm’s meeting with domestic refiners (Release…read out..not oil):
      • “The Secretary made clear that the Administration believes it is imperative that companies bring supply online to get more gas to the pump at lower prices. She reiterated that the President is prepared to act quickly and decisively, using the tools available to him as appropriate, on sensible recommendations.”
    • The Federal Trade Commission has proposed a rule to ban junk fees and bait-and-switch advertising tactics that can plague consumers throughout the car-buying experience.
    • Apple (AAPL): Announced That It Intends To Develop an Effective Dashboard That Does Not Distract the Motorist.
    • Coinbase (COIN) Global derivatives exchange to make nano bitcoin futures available through leading brokers.
    • FXI: China stocks log fourth weekly gain after Central Bank injects cash.
    • Lockheed Martin (LMT) awarded $580 million Air Force contract.
    • Primoris Services Corporation (PRIM) Awarded $260 Million Solar Project.
  • Exchange/Listing/Company Reorg and Personnel News:
    • Argo Group (ARGO) Appoints Thomas A. Bradley as CEO; Former CEO Kevin J. Rehnberg Departs.
    • Bausch Health (BHC) Chairman Joseph Papa resigns, effective immediately.
    • Centennial Resource Development (CDEV) On July 8th, Chief Development Officer Joe Zavalishin will resign from the Company.
    • Epsilon (EPSN) Announces Senior Leadership Transition.
    • Great Lakes Dredge & Dock’s (GLDD) David Simonelli, COO, to retire.
    • J.M. Smucker (SJM) Mark Smucker, CEO,  will succeed Richard Smucker as Executive Chairman.
    • Oragenics (OGEN) Appoints Seasoned Vaccine Executive Kimberly Murphy as President and Chief Executive Officer.
    • Scorpio Tankers Inc. (STNG) Announces Purchase of Common Shares by the President of the Company.
  • Buyback Announcements or News:
    • Bally’s (BALY) Commences Modified Dutch Auction Tender Offer To Purchase Up To $190 Million Of Its Outstanding Common Shares.
    • Bar Harbor Bankshares (BHB) Announces Stock Repurchase Plan.
    • Ferguson PLC (FERG) Continues it’s $2 billion share repurchase program with a non-discretionary arrangement with J.P. Morgan.
  • Stock Splits or News: 
    • HOTH: At the Annual Meeting, the shareholders did not approve the Reverse Stock Split.
    • Staffing 360 Solutions (STAF) Announces Reverse Stock Split to Maintain NASDAQ Listing.
  • Dividends Announcements or News:
    • Saul Centers (BFS) increases quarterly dividend $0.59 per share, a 3.5% increase.
    • Smith & Wesson Brands (SWBI) authorizes a 25% increase in its quarterly dividend to $0.10 per share.

What’s Happening This Morning: Futures value reflects the change with fair value.

S&P 500 +28, Dow Jones +208, NASDAQ +97, and Russell 2000 +13. Europe higher and Asia higher as well.  VIX Futures are at 28.46 from 28.75 yesterday morning and the VIX closed at 29.05 from 28.95 yesterday. Gold, Silver and Copper lower. WTI Crude Oil  and Brent Oil Futures higher and Natural Gas higher. $ is lower vs Euro, lower vs Pound and higher vs Yen. US 10 year Treasury sees yields at 3.12% from 3.13% yesterday morning. Bitcoin is at $21,159 from $20,661.25 yesterday morning and is higher by 1.93% this morning. As of 8:07 a.m. EDT.

Sector Action – 06/23/22 Close (1/3/6/12/YTD Updated Weekly with Monday release):   

  • Daily Positive Sectors: Healthcare, Real Estate, Consumer Cyclical, Utilities, Consumer Defensive, Technology of note.
  • Daily Negative Sectors: Energy, Basic Materials of note.
  • One Month Winners: none of note.
  • Three Month Winners: none of note.
  • Six Month Winners: Energy of note.
  • Twelve Month Winners: Energy of note.
  • Year to Date Winners: Energy of note.

All indexes ended in the green led by NASDAQ at 1.62%.  UNG was down 8.06% and TLT continued it’s rise by 0.82%.  Updated 06/23/22 close.

Upcoming Earnings Of Note: (sorted by market cap, highest to lowest with most visible names)

  • Friday After the Close: None of note.
  • Monday Before the Open: None of note.

Earnings of Note This Morning:

  • Beats: KMX +0.01.
  • Flat: None of note.
  • Misses: None of note.
  • Still to Report: CCL.

Guidance:

  • Positive Guidance: FDX  of note.
  • Negative Guidance: TREE of note.

Erlanger Research Advance/Decline Chart: Updated through 06/23/22 close.

Gap Ups & Down In Early Pre-Market:

  • Gap Up: PRIM +5%, FERG +5%, SWBI +4%, SWBI +4%.
  • Gap Down: CAMP -16%, TREE -10%, REV -6%, SRPT -4%.

Insider Action: EVA sees Insider buying with dumb short selling. OII Insider buying with smart short sellers. 06/23/22 close.

Rags & Mags: Repeated stories from prior days never listed, i.e. “rehashed news”. Sorted by Global, U.S. and stock specific.

  • Stocks Making The Biggest Moves: KMX SGEN FDX (CNBC)
  • Five Things You Need to Know to Start Your Day (Bloomberg)
  • Bloomberg Lead Story: Senate passes gun legislation by a wide margin. (Bloomberg)
  • Bloomberg Most Read Story: Juul ordered off the market. (Bloomberg)
  • Ukraine withdraws from Sievierodonetsk amid heavy Russian bombings. (NYT)
  • Europe worried about a total natural gas shutdown by Russia. (CNBC)
  • Hackers steal $100 million in Crypto. (Bloomberg)
  • Zendesk (ZEN) close to acquisition. (WSJ)
  • Merck (MRK) may  bid for Seagen (SGEN). (WSJ)
  • Phillips (PSX) produced renewable fuels without proper permits. (Reuters)
  • Toyota (TM) and Subaru recall some EV models. (Reuters)
  • Robinhood Snacks looks at NFT invasion of NYC Times Square and ability to survive a Crypto Winter. Meal provider Daily Harvest sickens customers raising concerns of delivery companies.

Moving Average Update:

  • Score doubles to 34%!  Updated 06/23/22 close.

Geopolitical: 

  • President’s Public Schedule:
    • The President receives the President’s Daily Brief, 9:30 a.m. EDT
    • Press Briefing by Press Secretary Karine Jean-Pierre, 2:00 p.m. EDT

Economic: 

  • May New Home Sales are due out at 10:00 a.m. EDT and is expected to raise to 595,000 from 591,000.
  • Consumer Sentiment 10:00 a.m. EDT
  • Baker Hughes Rig Count 1:00 p.m. EDT

Federal Reserve / Treasury Speakers:

  • Federal Reserve St. Louis President James Bullard 7:30 a.m. EDT  – Highlights:
    • I think the U.S. Will be fine, rate hikes will slow economy to trend pace of growth.
    • No sign from households that we are in imminent stages of them pulling back meaningfully.
    • Will keep seeing reopening effects in 2q-4q 2022.
    • US economy has show tremendous resilience, households are in great position going forwards.
    • Current models probably not a good indicator of recession risk.
    • Some components of GDP behaving strangely.
    • Unless we get hit by a big shock, unusual to go back into recession at this stage.
    • Frontloading rate hikes is a good idea in this situation.
    • I want to move up rates to 3.5% this year.

M&A Activity:

  • Arthur J. Gallagher & Co. (AJG) Acquires INNOVU Group Holding Company Limited.
  • Barclays PLC (BCS) acquires Kensington Mortgage Company.
  • NerdWallet (NRDS) to acquire On The Barrelhead for $120 million.

Meeting & Conferences of Note:

  • Sellside Conferences:
    • DEUTSCHE BANK dbAccess Berlin Conference
    • HSBC Asia Energy Transition Virtual Conference 2022
      • Previously posted and ongoing conferences:
        • Credit Suisse Biotech Conference
        • Goldman Sachs Summer Digital Asset Conference
        • HSBC Global Digital Finance Forum 2022 (06/20/22-06/30/22)
        • HSBC 6th Annual Asia Credit Conference 2022 (06/13/22-06/24/22)
        • UBS Latam Conference
        • Wolfe Research June Consumer Conference
  • Company Meetings: SMLP.
  • Fireside Chat: None of note.
  • Investor/Analyst Day/Calls: ABMD, HUM.
  • Update: CCL, NTLA.
  • R&D Day: None of note.
  • Company Event: None of note.
  • Industry Meetings:
    • EASL International Liver Congress 2022 (06/24/22-06/26/22)
    • Cambridge HPB Surgery Symposium (Rapid diagnosis and enhanced staging)
    • Illinois Defense Council (IDC) Annual Meeting and Awards Luncheon 2022
    • Society for Birth Defects Research & Prevention (BDRP) Annual Meeting (06/25/22-06/29/22)
    • HCU Network America, Organic Acidemia Association and Propionic Acidemia Foundation Conference 2022 (06/25/22-06/26/22)
    • Federation of American Societies for Experimental Biology: The NAD+ Metabolism and Signaling Conference 2022 (06/26/22-06/30/22)
    • NACDA (National Association of Collegiate Directors of Athletics) Convention 2022 (06/26/22-06/29/22)
      • Previously posted and ongoing conferences:
        • NPC Patient and Family Conference 2022 (06/23/22-06/24/22)
        • The Extracellular Matrix Pharmacology Congress (ECM) 2022 (06/23/22-06/25/22)
        • EASL International Liver Congress 2022 (06/22/22-06/26/22)
        • American Bankers Association’s Regulatory Compliance Conference 2022 (06/21/22-06/24/22)
        • International Microwave Symposium (IMS) 2022 (06/19/22-06/24/22)
        • ChemCon Europe 2022 (06/20/22-06/24/22)

Top Tier Sell-side Upgrades & Downgrades:

The recommendations listed below in this “Upgrade/Downgrade” section are compiled from what we believe are Tier I, II and III firms. Recommendations posted are taken from a variety of sources each day and we only post upgrades or significant initiations as well as downgrades to underweight or sell. The purpose of this posting it to make the reader aware of market moving recommendations. None of these recommendations should be interpreted as actual recommendations from CAPIS or its employees.

Today’s Upgrades and Downgrades:

Previous Day’s Upgrades and Downgrades: